Employers are probably aware that when an employee is terminated by an Employer for any reason (other than for misconduct), the Employer must provide the employee with a certain period of notice, or make payment of wages instead of notice.
But what happens if the employee resigns on the spot without providing you with any notice?
Generally, all Modern Awards contain a ‘Termination of Employment’ clause that requires an employee who intends to resign to provide you with a minimum period of notice of termination, and the period of notice is calculated as such – if the employee has worked with you:
For less than a year: the minimum notice period is one (1) week
Between 1-3 years: the minimum notice period is two (2) weeks
Between 3-5 years: the minimum notice period is three (3) weeks
5 years or more: the minimum notice period is four (4) weeks
If an employee resigns and fails to provide you with the minimum period of notice, the relevant Modern Award that applies to your business will entitle you to withhold either up to one week’s wages, or up to an amount equivalent to the amount that the employee would have earned if they had provided you with the required period of notice and had worked such notice. You should check the applicable Modern Award to see which applies.
If you employ an employee that is not covered under a Modern Award, such a clause may be drafted into the employment agreement between the Employer and that Employee.
